The Black Budget

Introduction

This topic will offer sources and commentary on the Pentagon's "Black Budget," which refers to the classified segment of the U.S. military budget. It's concealed not only from other countries but from the American people and even Congress.

The primary justification for hiding the black budget is that revealing it would undermine our security efforts. This is a bad argument for several reasons. First, revealing the general character of a defense program (and its cost in dollars) does not automatically enable prospective aggressors to avoid the program or its deterrent effect.

More specifically, as the game-theory analysis undertaken below shows, making deterrents secret undermines most of their deterrent effect.

Besides, U.S. Const. Art. 1, Sec. 9, Cl. 7 provides: "No money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law; and a regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time." The black budget is a blatant violation of this clause, but the Supreme Court case ruling on the question (U.S. v. Richardson), elided the important question with a technicality over standing.

The case cited below prevented legal challenge to the Black Budget by the legal fiction of lack of standing. I should analyze other standing cases and demarcate the degree of hypocrisy.

Study Idea

An interesting study would create an individualized survey for a sample of taxpayers that calibrated the annual costs of the defense budget to the respondent's income. A survey question would give a short description of a defense program, and then state how much the respondent is spending in taxes to fund it this year (or will spend later, since its deficit spending). Then the person will check a box, deciding whether the program should stay or go.

Sources

"Documented - vaguely - in funding requests and authorizations voted on by select committees of the US Congress, the black budget is published with omitted dollar amounts and blacked-out passages. It hides all sorts of strange projects, not just from enemies, foreign and domestic, but from the public and elected officials as well. Last year, for instance, it was revealed that the National Reconnaissance Office had for several years used the black budget to hide from Congress the cost and ownership of a $300 million office building, even though the structure was plainly visible from Route 28 west of Washington, DC."

"An internal Pentagon memo from August 1994, which was accidentally leaked and showed up in Defense Week, revealed some hard numbers: the National Security Agency spends $3.5 billion a year; the Defense Intelligence Agency $621 million; and the Central Imagery Office $122 million for spy-satellite work. "

"Classification can be viewed as the information equivalent of the national debt. Information we put off releasing is like debt we put off paying. Like the fiscal deficit, it costs a lot to service and maintain. Keeping things secret requires guards, vaults, background checks. A General Accounting Office study placed the cost at $2.2 billion, but the office pointedly noted that its calculations had been hampered by the refusal of the CIA to cooperate. Private industry spends an estimated $13 billion more adhering to government security standards."

"The classified budget of the Defense Department, concealed from the public in all but outline, has nearly doubled in the Bush years, to $32 billion. That is more than the combined budgets of the Food and Drug Administration, the National Science Foundation and the National Aeronautics and Space Administration."

The Pentagon wants to spend just over $50 billion on classified programs next year, newly-released Defense Department budget documents reveal. "That's the largest-ever sum," according to Aviation Week's Bill Sweetman, a longtime black-budget seer -- a three percent increase over last year's total.

It makes the Pentagon’s secret operations, including the intelligence budgets nested inside, “roughly equal in magnitude to the entire defense budgets of the UK, France or Japan,” Sweetman adds. All in all, about seven and a half percent of the Defense Department’s total spending is now classified."

For a number of years the GAO has compiled a parallel set of books for the Federal Government called the Financial Report of the United States.

This report attempts to impose “Generally Accepted Accounting Principles” to the government’s financial reporting process in order to give a clearer picture of the government’s actual assets and liabilities and thereby enable better planning. Neither the Pentagon nor the Department of Housing and Urban Development (HUD), to name just two, have ever been able to pass a GAO audit on this basis. . .

Today the Pentagon utilises no accountable means of tracking money authorised by Congress from its initial authorisation to its use, say in developing a fighter plane.

Running a 21st century military machine using antique accounting methods is an anomalous situation with interesting implications, not least of which is that government agencies cannot, or will not, explain what they are doing with the money that is appropriated for their operations by Congress...

Few Americans are probably aware that Lockheed Martin, builder of the F22 air superiority fighter, is also a major outside contractor supplying financial control and accounting systems to the Pentagon.

Lockheed also has a subsidiary employed by HUD to administer housing in American cities, an unusual diversification for a corporation the majority of whose business is done with the military and intelligence agencies. [ii]

Similarly Dyncorp (recently acquired by Computer Sciences Corporation) is another contractor that, like Lockheed, derives almost all its revenue from government security and military contracts.

It is also a contractor supplying information technology to a variety of government agencies including the Pentagon, HUD, the Securities and Exchange Commission (SEC) and the Department of Justice.

At the Department of Justice it manages the case management software used by DOJ lawyers to manage investigations. [iii]

No one knows exactly what the figure is because the intelligence agencies have successfully argued that nobody, including Congress, should know how much they get, for fear that the mere size of the budget would provide useful information to America's enemies.

Never mind that in 1997 and 1998, in response to Freedom of Information Act requests, the intelligence budget's size was released (it was $26.6 billion and $26.7 billion respectively), and no intelligence disasters ensued.

In fact, there is absolutely no reason for Americans not to know the precise amount of money that gets poured into intelligence, except that it would probably lead to calls for something to be done about this incredible waste of money.

Secrecy has no place in a democracy, which is why the United Kingdom, Canada and the Netherlands have all decided to make their intelligence budgets public...

according to an organization called the Intelligence Resource Program, which monitors such things, the U.S. in 2004 is spending in excess of $40 billion on intelligence. That represents a 50 percent increase over 1998, just six years earlier. It is far mor---in fact about double in constant dollars, what was being spent on intelligence by the U.S. at the height of the Cold War.

It also represents over $150 per year from every man, woman and child in America, or if you prefer, about $600 per family.

$40 billion is an amount much bigger than the budgets of nearly all the states in the U.S., and most of the countries of the world. It's bigger than the entire gross domestic product of many of the world's nations, and more than the U.S. government itself spends on justice ($24 billion), Interior ($9 billion), energy ($23 billion), housing and urban development ($39 billion), NASA ($16 billion) or even Homeland Security ($31 billion)! It's about two-thirds of what the federal government spends annually on education ($65 billion). . .

The real question is why does the U.S. need such a humongous intelligence budget. Advocates, of course, will say it's to keep us safe from terrorism. But this budget has been gargantuan long before anyone in Washington was paying any attention to terrorism as an issue. Indeed, it was gargantuan even as it entirely failed to warn the country of the impending attack by Al Qaeda on the World Trade Center and the Pentagon. In fact, very little of that $40 billion going to intelligence spending this year is aimed at terrorism and terrorists. Much of it goes to operating spy satellites that monitor most of the nations of the globe. Much of it goes to interfering with and spying on the governments, both enemy and friend, around the world (as when the U.S. spied on and tapped the phones of the diplomatic offices of the other members of the UN Security Council during the 2003 vote threatening Iraq with "serious consequences".

And a decent part of it is used to spy on and monitor us...

Arguably, in fact, the very existence of such a massive secret government agency or collection of agencies, undermines the very foundation of democracy, and is more characteristic of a police state.

At a public intelligence conference in San Antonio, Texas, last week, Mary Margaret Graham, a 27-year veteran of the CIA and now the deputy director of national intelligence for collection, said the annual intelligence budget was $44 billion.

"I thought, 'I can't believe she said that,"' Whitelaw said Monday. "The government has spent so much time and energy arguing that it needs to remain classified."

Carl Kropf, a spokesman for the office of the director of national intelligence, John Negroponte, said Graham would not comment. Kropf declined to say whether the figure was accurate or whether her revelation had been accidental.

"It is ironic," Aftergood said. "We sued the CIA four times for this kind of information and lost. You can't get it through legal channels."

In court cases, intelligence officials have argued that disclosing the spy budget would create pressure to disclose more spending details, and that such revelations could aid U.S. adversaries.

That argument has been rejected by many in the Congress and other experts, who note that most of the Defense Department budget is published in exhaustive detail without evident harm.

Former California representative Randy "Duke" Cunningham's guilty plea to bribery and tax evasion exposed Washington's backroom ways, where gifts to lawmakers are sometimes followed by official actions that benefit the officeholder's benefactors. But Cunningham's intervention on behalf of companies went far beyond the projects disclosed in court filings. Capitol Hill sources say Cunningham also delivered for the businesses that bribed him by slipping projects into the super-secret "black budget" that funds classified intelligence work.

Does a federal taxpayer have standing to force the government to disclose expenditures of the CIA? The Court held that Richardson did not have standing to sue. Using the two-pronged standing test of Flast v. Cohen (1968), Chief Justice Burger found that there was no "logical nexus between the status asserted [by Richardson as a taxpayer] and the claim sought to be adjudicated." It was clear to Burger that Richardson was not "a proper and appropriate party to invoke federal judicial power" on this issue.

Florence Flast and a group of taxpayers challenged federal legislation that financed the purchase of secular textbooks for use in religious schools. Flast argued that such use of tax money violated the Establishment Clause of the First Amendment. A district court held that the federal courts should defer when confronted with taxpayer suits directed against federal spending programs.

Did Flast, as a taxpayer, have standing to sue the government's spending program? In an 8-to-1 decision, the Court rejected the government's argument that the constitutional scheme of separation of powers barred taxpayer suits against federal taxing and spending programs. In order to prove a "requisite personal stake" in such cases, taxpayers had to 1) establish a logical link between their status as taxpayers and the type of legislative enactment attacked, and 2) show the challenged enactment exceeded specific constitutional limitations imposed upon the exercise of Congressional taxing and spending power. The Court held that Flast had met both parts of the test.

The Obama administration has directed defense officials to sign a pledge stating they will not share 2010 budget data with individuals outside the federal government.

In an undated non-disclosure agreement obtained by Defense News, the administration tells defense officials that "strict confidentiality" must be practiced to ensure a "successful" and "proper" 2010 defense budget process.

The pledge covers any data about the 2010 budget, including: "planning, programming and budgeting system documents and databases, and any other information" that concerns the administration's internal discussions about "the nature and amounts of the president's budget for fiscal year 2010, and any supplemental budget request during the current fiscal year."

The administration is requiring defense officials to promise they will not divulge the kinds of information covered in the document "to any individual not authorized to receive it."

"Under no circumstances will I disclose such information outside the Department of Defense and other government agencies directly involved in the defense planning and resource-allocation process, such as the Office of Management and Budget," the agreement said.

In his address last night on the economic crisis, President Barack Obama made it official: No more budgetary sleight-of-hand at the Pentagon.

"That is why this budget looks ahead ten years and accounts for spending that was left out under the old rules – and for the first time, that includes the full cost of fighting in Iraq and Afghanistan," he said. "For seven years, we have been a nation at war. No longer will we hide its price."

You wouldn't know it from the most-exhausting-ever presidential primary campaigns, but the 2009 defense budget commits the United States to spending more (again, in real dollars) to defeat a ragtag band of terrorists than it spent at the height of the Cold War fighting the Soviet superpower and what we alleged were its surrogates in the Korean and Vietnam wars.

Should the CIA's budget be secret? Three former CIA directors say no -- disclosure of the total amount of CIA spending would not harm national security, as long as individual budget items were kept secret.

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